DOJ Asks U.S. Supreme Court Not to Hear Case with Potential Major Impact on Cloud-Computing Copyright Issues
On May 29, 2009, the U.S. Department of Justice, submitted an amicus curiae brief which requested that the U.S. Supreme Court not accept certiorari in the case Cable News Network, Inc. v. CSC Holdings. The Cable News Network case is critical because it is one of the first to deal with the copyright infringement problems implicit in user-controlled remote data storage services. While the service at issue is a remote DVR service, the ruling could have a major impact on copyright issues faced by cloud computing services, as well.
Cloud computing is an umbrella term for computer services that permit user programs or data files to be stored remotely and then accessed via the Internet. A well-known example is the expected Google G-Drive, which has been described as "online file backup and storage" that will provide "reliable storage for [user] files, including photos, music and documents" and "allow [ users] to access [their] files from anywhere, anytime, and from any device - be it from [their] desktop, web browser or cellular phone.
The problem with remote data storage services is that computer storage necessarily requires making copies of program and data files -- copying that could run afoul of the Copyright Act. The Copyright Act gives the copyright owner the right to "reproduce" its copyrighted work "in copies or phonorecords" 17 U.S,C. § 106(1). "Copies" are defined as "material objects . . . in which a work is fixed by any method . . . and from which a work can be perceived, reproduced or otherwise communicated. 17 U.S.C. § 101. A work is "fixed" when "its embodiment in a copy . . . is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than a transitory duration." Id.
Based on these sections, many Circuit Courts have held that making even temporary copies of files, such as occurs when a computer program is downloaded into the random access memory (RAM) of a personal computer (PC), constitutes copying for purposes of the Copyright Act. See MAI Systems Corp., 991 F.2d 511 (9th Cir. 1993); Stenograph LLC v. Bossard Assoc., Inc., 144 F.3d 96 (D.C. Cir. 1998); Storage Technology Corp. v. Custom Hardware Engineering & Consulting, Inc., 421 F.3d 1307 (Fed. Cir. 2005). This is sometimes called the "RAM copy" doctrine.
In Cable News Network, Inc. v. CSC Holdings, Cablevision (CSC) announced plans to offer a service called a remote-storage digital video recorder (RS-DVR). The service operates like a set-top DVR, except that the data would be stored on CSC's servers. Several broadcasters, including CNN, the Cartoon Network and others, sued claiming that the service violated their reproduction rights because the broadcast data would be briefly stored in Cablevision's buffers, and then more permanently stored its servers. The plaintiffs sought to enjoin this service, and force Cablevision to obtain additional licenses, for what they viewed amounted to free video-on-demand.
The district court agreed that Cablevision's service violated the plaintiffs' copyrights. Because Cablevision was doing the copying, copying the plaintiffs' materials onto their servers violated the plaintiffs' reproduction rights. Relying on the RAM copy doctrine, the District Court also found that Cablevision's buffer copies also violated the plaintiffs' copyrights.
The Second Circuit reversed. See Cartoon Network LP, LLP v. CSC Holdings, Inc., 536 F.3d 121 (2nd Cir. 2008). The Second Circuit found that there was no functional difference between a user's copying a television program to a VCR and a user's copying material onto Cablevision's RS-DVR system: "Copies produced by the RS-DVR system are "made" by the RS-DVR customer, and Cablevision's contribution to this reproduction by providing the system does not warrant the imposition of direct liability." 536 F.3d at 133. The Second Circuit also found that making buffer copies did not constituting copying, as the term is defined in the Copyright Act. Rejecting the application of the RAM copy doctrine, the Court held that because the copies would only exist for a second or two, they were of "transitory duration" -- and hence were not "fixed." Id. at 130.
The broadcasters filed a writ of certiorari in late 2008. Before deciding whether to take the case, the Supreme Court requested the Department of Justice to weigh in. The DOJ finally filed its brief last Friday and requested the high court to not reconsider the Second Circuit decision. The DOJ's primary argument is that the appellate record is simply not sufficiently developed on the application of copyright law to remote storage or cloud computing issues -- with this being the first Circuit Court decision on the issue. The also DOJ claimed that the Second Circuit's decision did not conflict with the RAM copy doctrine of MAI Systems Corp. and its progeny, because RAM storage was less temporary that buffer storage and thus might properly be considered to be of more than "transitory duration."
I would expect the Supreme Court to give considerable weight to the DOJ's request that it not accept certiorari. Of course, this is no guarantee that it will not decide to take what is clearly an important case in a cutting-edge area of technology and commerce.
David D. Johnson is a business lawyer whose practice focuses on litigation and other issues relating to digital media and consumer electronics companies. David can be contacted at (310) 785-5371 or DJohnson@jmbm.com.
